Pharmaceutical major Cipla’s stock surged 3.53% to a record high of Rs 1,206.95 on reports that Blackstone is looking to buy a substantial stake in it. Cipla was the top Nifty 50 gainer and shares had soared over 6% in early trade to Rs 1,238.70.
Media reports earlier said that Blackstone is all set to make a non-binding proposal next week for a 33% promoter holding in Cipla, which is India’s third-largest generics company by revenue. With this, the Hamied family’s eventual exit from the pharma company, which was founded in 1935, will begin publicly.
Revenue for the quarter ended June 2023 climbed 17.7% year-on-year to Rs 6,328.9 crore from Rs 5,375.2 crore, driven by performance in India, the United States, and South Africa.
Cipla’s Q1 performance exceeded expectations due to solid US sales growth and sustained progress in the home market. As a result, analysts are positive on Cipla shares, with most brokerage houses boosting their target price.
In the event that Blackstone proceeds with its move, it would lead to an open offer for an extra 26% of the company’s shares.
If this offer is fully subscribed, Blackstone has the potential to own as much as 59.4% of the pharmaceutical major. Such a scenario would mark one of the largest private equity-led buyouts in the Indian market.